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According to a recent study by Ally Investing, 61 percent of adults find investing in the stock market “scary or intimidating.” Despite this fear, investing in financial markets is one of the best things that Americans of any age can do to get on the road toward financial well-being.

No matter where you are on your financial journey, this guide can help you get started.

Why investing is important

Investing is the most effective way Americans can build their wealth and save for long-term goals like retirement.

The sooner you begin investing, the sooner you can take advantage of compound interest, which allows the money you put into your account to grow more rapidly over time. Ultimately, you’re looking for your investments to grow enough to not only keep up with inflation but actually outpace it, to ensure your financial security in the future.

First thing’s first: Look into retirement accounts

For many traditional employees, the best place to begin is your retirement plan (likely a 401(k)) offered through your employer’s benefits package.

In a 401(k) plan, the money you contribute each month will grow tax-free until you begin withdrawals upon reaching retirement age. Many employers even offer matching contributions up to a certain percentage for employees who participate in their sponsored plans. Use Bankrate’s 401(k) calculator to see how much your money can grow in this type of account throughout your career.

The logistics of a 401(k) can be confusing, especially for recent grads or those who have never contributed before. Look to your employer for guidance. “Chances are your workplace might have the tools and resources to help you with financial wellness, or they have resources and materials to help educate the employee on what the style of their investment options are within the 401(k) plan,” says Dan Andrews, financial planner and founder of Well-Rounded Success in Fort Collins, Colorado.

If your employer doesn’t offer a 401(k) plan, you’re a non-traditional worker, or you simply want to contribute more, consider opening a traditional IRA or Roth IRA. A traditional IRA is similar to a 401(k): you put money in tax-free, let it grow over time and pay taxes when you withdraw it in retirement. A Roth IRA, on the other hand, invests taxable income then is not taxed upon withdrawal. There are also specialized retirement accounts for self-employed workers.

The IRS limits the amount you can add to each of these accounts annually. For 2019, the contribution limit is set at $19,000 for 401(k) accounts (before employer match) and $6,000 for an IRA. These limits increase for workers over age 50 to allow for catch-up contributions.

Long-term vs. short-term?

Your time frame can change which types of accounts are most effective for you.

If you’re focusing on short-term investments, those you can access within the next five years, money market accounts, high-yield savings accounts and certificates of deposit will be the most useful. It’s generally not a good idea to invest in the stock market short-term because five years or less may not be enough time for the market to recover if there’s a downturn.

The stock market is an ideal vehicle for long-term investments, however, and can bring you great returns over time. Whether you’re saving for retirement, looking to buy a house in 10 years or preparing for your child’s college tuition, index funds, mutual funds and exchange-traded funds all offer stocks, bonds or both.

Getting started is easier than ever with the rise of online brokerage accounts designed to fit your personalized needs.

Assess your risk tolerance

Risk tolerance is one of the first things you should consider when you start investing. “A lot of young people say that they want to get 300 percent in the stock market but they don’t want to lose a dime,” Andrews says. While that isn’t realistic, Andrews says it’s a great start to get new clients to begin discussing their risk tolerance and aversion.

As you think about risk in regard to long-term investing, it all comes down to diversification. You can be a bit more aggressive in your diversification of stocks and bonds when you’re young and your withdrawal date is distant. As you inch closer to retirement or the date you’re looking to withdraw from your accounts, start scaling back your risk. Your diversification should grow more conservative over time so you don’t risk major losses in a market downturn.

“I recommend people do that diversification in what’s known as index funds and more passive investing approaches,” Andrews says. “So instead of investing one stock, which is very risky, you kind of just invest in the overall stock market, which is still risky but not as risky as investing in individual stocks.”

Another common passive fund type that can put your risk aversion at ease and make your investment journey easier is a target-date fund. These “set it and forget it” funds automatically adjust your assets to a more conservative mix as you approach retirement.

Don’t fall for easy mistakes

The first common mistake new investors make is being too involved. According to Andrews, passive investment strategies are a great way to not only keep your costs low but also keep from getting in your own way. Research shows that actively traded funds often underperform compared to passive funds. Your money will grow more and you’ll have peace of mind if you keep yourself from checking (or making changes) your accounts more than a few times each year.

Another danger is failing to use your accounts as they’re intended. While you’re allowed to take out a loan from your 401(k), not only do you lose the market gains that money could be earning, but you also must pay the loan back within five years (unless it’s used to purchase a home) or you’ll pay a 10 percent penalty on the outstanding balance.

“You’re just wasting money if you’re seeing it as a piggy bank versus as your grey-haired account,” Andrews says. “Use the accounts as they’re intended, and if there are penalties or stipulations that are trying to prevent you from doing something, take a step back and ask, ‘Why is this penalty there?’ so you can have a moment to reflect.”

Learn a little, save a lot

The good news is you’re already working on one of the best ways to get started: educating yourself. Take in all the reputable information you can find about investing, including books, online articles, experts on social media and even YouTube videos. There are great resources available to help you find the investing strategy and philosophy that’s right for you.

You can also seek out a financial planner who will work with you to set financial goals and personalize your journey. As you search for advisor, Andrews says, “You want to make sure that they’re operating in your best interest.” Ask them questions about their recommendations, confirm that they are a fiduciary acting in your best interest and make sure you understand their payment plan so you’re not hit by any hidden fees.

For more investing information, see Bankrate’s picks for the best brokers and investment accounts available today: